Natural Gas Market Overview
Despite a higher-than-expected storage build, the natural gas market remains surprisingly resilient. The July NYMEX contract briefly tested resistance at $3.791/MMBtu before pulling back. Still, prices have climbed 23¢ since Friday—even as mild weather, a bearish EIA storage report, extended LNG maintenance, and higher production have all worked to keep prices in check. Henry Hub spot prices in the $2.80s/MMBtu are also limiting gains in the front month.
Looking ahead, several factors could shift market momentum in the next week or two:
- The potential return of the Cameron LNG facility
- Forecasts for a hot end to June
- Technical resistance at the 20-day moving average remains strong.
- Weather risks: If cooling degree days (CDDs) remain below average or an early tropical storm develops, spot prices may remain subdued, potentially delaying a summer rally.
While midsummer is expected to bring much tighter supply-demand balances, bullish sentiment is building. However, short-term storage surpluses could limit the upside potential as we move into autumn. The market is still expected to test $4.00/MMBtu before any significant softening later this year.
EIA Natural Gas Storage Report
Prompt-month NYMEX natural gas was trading at $3.65/MMbtu in morning trading, down $0.064/MMbtu as of 11:00 a.m. ET.
- The EIA reported an injection of 122 Bcf into underground storage for the week ending May 30, vs. an estimated injection of 113 Bcf.
- Inventories are 2,598 Bcf, 288 Bcf or 10% less than the same period last year and 117 Bcf or 4.7% more than the 5-year average.
- The main heat ridge is centered over the upper West, with a more variable pattern downstream in the Midwest and East. This can bring pulses of warmth eastward, but divergence aloft keeps chances for rain and storms in the pattern that also bring periods of below-normal temperatures, especially over the mid-con, where the ground is very wet from recent storms.
- After a quick cup of coffee below the optical $3 level in late April, prompt month natural gas prices have found a home above it with summer heat propping up bullish sentiment on the contract; now trading around $3.69/MMBtu.
US Weather Outlook
US Weather Forecast: June 9–15
- Southern & Eastern US: Expect warm to very warm conditions, with highs in the 80s and 90s. Some parts of California and the Southwest could see temperatures exceed 100°F.
- Midwest, Plains & Ohio Valley: More comfortable weather is on tap, with highs ranging from the 60s to low 80s.
- Pacific Northwest: Prepare for a heat wave this weekend and into next week, with temperatures climbing from the mid-80s up to the 100s.
- National Outlook: Weather-related energy demand is expected to be light to moderate over the next week.
Electricity Market: What to Expect on Your Bill
Due to recent PJM auction results, your facility can expect a 15–20% increase in electricity costs this month. The rapid growth of AI manufacturing, electrification, and electric vehicles is putting additional strain on the grid, and these demand-side pressures are expected to intensify over the next seven years—just as some supply sources are scheduled to retire.
We’re committed to helping you navigate these changes and minimize your reliance on an increasingly stressed grid.
What You Can Do Now
- Consider Energy Hedging
- Implementing hedging strategies could reduce your electricity costs by up to 15% compared to traditional fixed-rate contracts.
- Engage with Our Experts
- Schedule a complimentary onsite energy audit to:
- Identify all possible energy conservation measures.
- Improve electrical service reliability and backup solutions.
- Explore alternative onsite generation options.
- Find operational improvements to offset peak usage.
Staying proactive is the best way to manage rising costs and ensure your facility’s energy resilience. Contact our team for personalized support and tailored solutions.